How to Start a Small Business in San Diego, CA

When starting your own small business, there are a few things you have to know to make sure you’re doing it right. Here are the six basic steps of how to start a small business in San Diego, CA. 

1. Create a Business Plan

A business plan is a road map that helps you determine where you are headed with your business and how you plan to get there. It can help you make important decisions along the way. 

A good business plan should have answers for questions like:

• What is the name of your business?

• What type of business is it? 

• What is your product or service? 

• Who are your potential customers? (age, gender, socioeconomic status)

• How will your business be positioned against your competition? 

• Will you have employees? How many will you need, and what will they do? 

• What will it cost to open your business and sustain it for twelve months? 

When you come up with the answers to these questions and others, you’re establishing a solid foundation for your business.

2. Find Funding

Every business needs at least a minor level of funding to get started and cover initial costs. Luckily, there are a few options for gathering and organizing those funds. 

Bootstrapping

This is the most direct approach to funding your small business. With bootstrapping, your savings or investments are used to pay for the initial costs of your new business. 

Bootstrapping gives you complete ownership of the business and doesn't require entering into debt. It can be limiting, though—if you don’t have the necessary capital, you can’t start your business. 

Family and Friends

Your close family and friends may be willing to invest in your small business ideas and cover necessary startup costs. No matter how close you are to your family and friends, always have a written agreement when money is involved. Specify what they are investing in and include any payment/repayment plan agreed upon.

Crowdfunding

There’s a growing trend for small businesses and startups to use companies like GoFundMe, Indiegogo, Kickstarter, or Patreon to cover the initial costs. These platforms give you a chance to reach out to the public and ask for investment help. Most successful companies using leveraged crowdfunding have used some type of incentive or bonus for investors. This helps potential investors see a direct investment benefit and helps increase the number of backers. 

Small Business Grants

Federal government grants are available depending on your business’ size, location, and market. While it can take some time to research and apply for a federal grant, they provide the capital you need for your business and typically have no requirement for repayment.

Small Business Loans

Banks and local credit unions can provide small business loans to kickstart your business. For loan approval, most financial institutions require information about your business, which you should have from creating your business plan. 

3. Determine Your Location

To start a business in San Diego, you must have a business address. While it can be tempting to start your business from home, that can lead to issues with your HOA and can blur the line between your professional and personal life. 

A great solution for small businesses is to use a Davinci virtual office or a virtual business address. 

Location matters when it comes to business. A company with an address on Broadway in downtown San Diego has a different level of professionality and clout than the same business run from the suburbs of Del Mar. Davinci’s virtual business addresses let you work remotely or at home while leveraging all of the benefits of having your business placed in the heart of San Diego.

Davinci virtual office locations aren’t limited to San Diego. You can run your business from the safety of your home but have the business address in any major metropolitan city. 

4. Obtain a Business License

Do you need a business license in San Diego to start a small business? Yes. Every business must have a valid state business license to sell products or services in California. 

How do you get a business license in San Diego? You can apply for a business license online to be a legitimate business. A key part of your license will be your business name and location.

You’ll also have to choose a registered agent for your business. This is a person who accepts tax and legal documents for your business. 

Finally, you’ll need an Employer Identification Number (EIN) from the IRS. This is for managing and tracking taxes to make sure you’re following all relevant laws. 

Depending on the structure of your business, before you can qualify for a business license, you may need to form a corporation, LLC, or nonprofit entity. 

5. Apply for Permits and Licenses

For most small businesses, all you need to operate is a business license, but depending on your industry, there may be additional required permits and licenses before you can operate. 

Check with federal permit and licensing requirements to ensure you are following all federal laws. Then check with the California Department of Tax and Fee Administration (CDTFA) for required state permits and licenses. Finally, speak with San Diego County for any special permits necessary for your business. This will make sure your small business is following federal, state, and local laws and regulations.

6. Start a Business Bank Account

While it’s possible to pay for your business entirely out of pocket, you should always keep your personal finances separate from your business. This helps protect your identity, simplify tax preparation, and protect your savings. You can sign up for a business account at any local bank or credit union. 

Choose Davinci Virtual Offices

Davinci provides virtual office solutions for small businesses in San Diego. Contact us to find out more about our virtual offices or office space rentals, and a representative will be in touch to answer all of your questions. 

About Coco Quillen

Coco is the Chief Operating Officer at Davinci Virtual Office Solutions. She manages the strategic development and operational implementation of services for Davinci. She works closely with all teams to ensure customers are well taken care of.